1982 (7) TMI 32

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.... an application under s. 256(2) of the I.T. Act, 1961, seeking a direction to the Income-tax Appellate Tribunal, Indore, for stating the case and referring it to this court for deciding the following questions : " (1) Whether, on the facts and circumstances of the case, the Tribunal was justified in applying the proviso to section 145 ? (2) Whether, on the facts and circumstances of the case....

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....O, instead of investigating further into the trading results shown by the assessee, wrongly applied the proviso to s. 145(1) of the I.T. Act. He, therefore, deleted the addition. The Department went up in second appeal before the Income-tax Appellate Tribunal. The Appellate Tribunal noted in para. 3 of its order as follows : " It was conceded on behalf of the assessee that the day-to-day sto....

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....ment year were not satisfactory. However, the G. P. rate estimated by the ITO was reduced from 14.9% to 13% and addition to the extent of Rs. 21,501 only was maintained. Learned counsel for the assessee contended, firstly, that there was no concession as has been referred to in the Tribunal's order and, secondly, that the material on record did not warrant action under the proviso to s. 145(1) ....

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....after converting them into saleable baling hoops, sold at a much higher price. However, the assessee could not explain whether the closing stock was of processed material or unprocessed material. He further noted patent inconsistencies in the valuation of the closing stock. Thirdly, he found that sales made by the branch to the head office were at no profit and in case those materials have been so....